Sina Expects to Beat Forecasts

Chinese Internet media company Sina Corp. on Monday said its second-quarter results would beat forecasts as the effect of the SARS virus outbreak failed to impede its rapid growth.

The news, and a subsequent upgrade of the stock’s rating by brokerage U.S. Bancorp Piper Jaffray, sent the shares up 16% in heavy Nasdaq trading. Rival Chinese Net stocks Sohu.com Inc. and Netease.com Inc. also soared, resuming their powerful rally of the last three months.

Shanghai-based Sina said it expects both revenue and earnings to be ahead of previous forecasts.

“The company was appropriately cautious while the SARS virus was hitting China,” Piper Jaffray analyst Safa Rashtchy said of the spring outbreak of severe acute respiratory syndrome that had chilled economic activity across China. He raised his rating on Sina to “outperform” from “neutral.”

Shares of Sina jumped on the news to levels not seen since 2000. The stock price later subsided somewhat to close out the day up $2.75, or 16%, at $20.25. Sohu.com closed up $2.60 at $34 and Netease.com up $2.47 at $36.47, both on Nasdaq.

While the share price surge in Internet stocks worldwide this year has echoed the dot-com craze of the 1990s, analysts say the Chinese companies have strong fundamentals, with each company already producing profit in the world’s most populous market amid spectacular sales growth.

China’s dot-coms are benefiting from popular demand for wireless text message services instead of relying on online advertising.

“It’s fair to assume that the market is strong for all three of them,” Rashtchy said of the spillover effect of Sina’s optimistic outlook on Sohu.com and Netease.com. However, the analyst left his ratings on the other two unchanged.

Sina boasts the second- largest media audience in China behind state-controlled television.